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Facebook could see a 7% decline in revenue due to new European data laws

Facebook could see a 7% decline in revenue due to new European data laws
[Photo: energepic.com/Pexels]

The EU General Data Protection Regulation (GDPR) comes into force on May 25 and will give EU citizens the legal right to control how their data is processed and used by tech companies. The GDPR will cement a user’s “right to be forgotten” and legally require companies to delete information about the user if they so request it. Needless to say, the GDPR will affect some tech giants more than others. Those like Apple, who don’t monetize user data, should be little affected, but according to a report from Goldman Sachs, companies like Facebook and Google owner Alphabet could see the GDPR hit their revenues:

“Our analysis shows that Alphabet’s net advertising revenue could see a -2% to 0% impact from GDRP, given our view that Search is largely protected as it relies less on user data to generate advertisements. Facebook could potentially see a negative impact of up to 7%, though we would highlight that this impact could be negated completely if it successfully obtains user consent for processing personal data. All-in, we believe both companies are well positioned to obtain consent, given direct relationships with users, though we believe Alphabet remains the better positioned of the two to minimize impact.”

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